According to the newest World Inequality Report 2022, India is a “poor and very unequal country with an affluent elite,” with the top 10% of the population owning 57% of the total national income and the bottom 50% owning only 13%.
The analysis also predicts a reduction in global income in 2020, with rich countries accounting for half of the drop and low-income and emerging regions accounting for the remainder. This is mostly owing to the influence of “South and Southeast Asia, particularly” India.
“When India is omitted from the research, it appears that the global bottom 50% income share actually increased slightly in 2020,” writes Lucas Chancel, co-director of the World Inequality Lab, together with economists Thomas Piketty, Emmanuel Saez, and Gabriel Zucman.
“While the top 10% and top 1% control 57% and 22% of total national income, respectively, the bottom 50% ‘s share has dropped to 13%. According to the research, “India stands out as an impoverished and unequal country with a rich few.”
According to the survey, India’s middle class is comparatively impoverished, with an average worth of Rs 7,23,930, or 29.5 percent of total national income, compared to the top 10% and 1%, who possess 65 percent (Rs 63,54,070) and 33 percent (Rs 3,24,49,360) of the entire national income, respectively.
In 2021, the Indian adult population’s average yearly national income will be Rs 2,04,200. According to the research, the bottom 50% earned Rs 53,610, while the top 10% earned over 20 times more (Rs 11,66,520). In India, the average household wealth is Rs 9,83,010, with the bottom half of the population owning nearly nothing, with an average wealth of Rs 66,280.
From 2014 onwards, the pre-tax national income share of the top 10% and lowest 50% has stayed relatively steady. According to the research, the quality of government-released inequality statistics in India has worsened significantly, making it particularly difficult to assess current disparity changes.
According to the Niti Aayog‘s new Multi-dimensional Poverty Index (MPI), one out of every four Indians is multidimensionally impoverished. Bihar has the highest proportion of persons who are multidimensionally poor (51.91% of the state’s population), followed by Jharkhand (42.16%) and Uttar Pradesh (37.79%).
Global inequities appear to be nearly as high today as they were during the early twentieth-century apex of Western imperialism, according to the analysis. According to the report, the poorest half of the world’s population “barely owns any wealth,” with only 2% of the total, while the richest 10% control 76% of the total.
According to the survey, the Middle East and North Africa (MENA) have the highest levels of inequality in the world, while Europe has the lowest. The top 10% income share in Europe is roughly 36%, whereas it is 58 percent in MENA. In East Asia, the wealthiest 10% get 43% of total income, whereas, in Latin America, it’s 55%.
As per the study, even as countries have grown wealthier over the previous 40 years, their governments have grown much poorer, a pattern exacerbated by the epidemic.
“In prosperous countries, the share of wealth held by public actors is close to zero or negative, implying that all money is held by private actors.” “The Covid crisis, during which governments borrowed the equivalent of 10-20% of GDP, primarily from the private sector, has amplified this trend,” the report concluded.
A modest progressive wealth tax on multimillionaires has been proposed in the report. “Given the high level of wealth concentration, governments can raise enormous revenue via modest progressive taxes.” “We find that 1.6 percent of global incomes might be created and reinvested in education, health, and the ecological transition in our scenario,” the report adds.
In terms of gender, women’s share of total work income (labour income) was around 30% in 1990 and is now less than 35%, according to the research.
Inequalities inside countries are now higher than those reported between countries, according to the report. At the same time, the disparity between the average incomes of the top 10% and the bottom 50% of people in a country has nearly doubled. “Despite economic catch-up and significant development in the emerging countries, the world remains exceptionally unequal today,” according to the research.
Deregulation and liberalisation policies have resulted in one of the world’s most dramatic increases in income and wealth disparity since the mid-1980s, according to the report. “While economic reforms have mostly benefited the top 1%, growth among low- and medium-income groups has been rather moderate, and poverty endures,” the report notes.